Sonnan Company showed profits for the last two years totaling $120,000 and $260,000, respectively. Sonnan Company paid a total of $90,000 to its owners over the two-year period.
A. How much remains in Sonnan Company as retained earnings at the end of the second year of business?
B. Briefly explain the concept of 'earning power' as it pertains to Sonnan Company.

Question

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The Answer of Sonnan Company showed profits for the last two years totaling $120,000 and $260,000, respectively. Sonnan Company paid a total of $90,000 to its owners over the two-year period.
A. How much remains in Sonnan Company as retained earnings at the end of the second year of business?
B. Briefly explain the concept of 'earning power' as it pertains to Sonnan Company.

Sonnan Company Showed Profits for the Last Two Years Totaling